Tesla’s fourth-quarter sales fell much more than expected

Tesla sales are down Fourth quarter of 2025as increasing competition and the expiration of the federal tax credit for electric vehicles continue to drain the company’s global ambitions. The numbers were much worse than many Wall Street analysts had expected.

The disappointing sales report raises questions about whether Tesla can reverse its declining fortunes and achieve its goals of deploying self-driving cars and humanoid robots, both of which have boosted the company’s valuation for many years.

Tesla reported deliveries of 418,227 vehicles in the fourth quarter, down 15.6 percent compared to the same three-month period in 2024. The number of deliveries was lower than the consensus number from Wall Street, which expected Tesla to deliver 422,850 vehicles. The company also said that it produced 434,358 vehicles during the fourth quarter of 2025, a decrease of 5.8 percent year-on-year. For a direct-to-consumer company like Tesla, deliveries are a proxy for sales.

Over the entire year, Tesla sold 1,636,129 vehicles, the vast majority of which were Model 3s and Model Ys. This represents an 8.5 percent decline in sales year-over-year The second year in a row Tesla recorded an annual decline in sales. The company produced 1,654,667 vehicles in 2025, a decrease of 6.7 percent year on year.

The decline in sales was widely expected, given the wild year Tesla has just had. Increased competition in the United States, Europe and China from legacy automakers promoting new, less expensive electric cars has seriously affected demand for Tesla. Tesla CEO Elon Musk’s emergence as a divisive political figure, pushing racist right-wing conspiracies on his social media platform It alienated many traditionally liberal Tesla customers.

Musk himself has said the company will face “some tough quarters” thanks to incentives expiring and other macroeconomic factors. But he believes Tesla will rebound when its AI plans come to fruition, including robotics and humanoid robots. Musk predicted this 50 percent of the US population will have access to a Tesla robotaxi By the end of 2025. So far, only a few vehicles are available in Austin and San Francisco to a limited number of customers.

The sales report comes on the heels of Musk getting approval from Tesla shareholders for his project Huge new salary package Which could make him the world’s first trillionaire. Musk will need to achieve a series of ambitious milestones to get compensation, including producing more than a million robots, one million taxis, and creating $7.5 trillion in value for Tesla shareholders.

But those shifts are likely years away — if they happen at all — leaving Tesla struggling in the current environment with an aging lineup and a deteriorating brand image. Company Cheaper versions have been released recently Its best-selling models include the Model 3 and Model Y, which were supposed to usher in a new era of demand for Tesla. But so far, the newly affordable cars have been unable to reverse the company’s downward trend.